House passes pandemic fraud bill to recover billions in illicit COVID-19 unemployment payments

The Republican-led House of Representatives passed a bill to address COVID-19 unemployment fraud on Thursday, enabling states to recover overpayments and extending criminal penalties for fraud to claim greater benefits.

The bill, known as the “Protecting Taxpayers and Victims of Unemployment Fraud Act,” would allow states to retain 25% of all fraudulent payments made under “Federal Pandemic Unemployment Compensation” or “Mixed Earner Unemployment Compensation” that they recover, according to the bill’s text, incentivizing them to investigate fraud. The programs ended up costing taxpayers over $794 billion.

The bill passed by a vote of 230 to 200, with all Republicans and some Democrats voting in favor. It was sponsored by Republican Rep. Jason Smith of Missouri, who chairs the House Ways and Means Committee, which has jurisdiction over all taxation measures.

BREAKING: The House just passed a bill to ensure taxpayers won’t be on the hook for billions in pandemic unemployment fraud – the greatest theft of taxpayer dollars in American history. Here’s why I voted for it: pic.twitter.com/M9DSzQ6npU

— Rep. Michelle Steel (@RepSteel) May 11, 2023

“[H]undreds of billions were being stolen from those in need. Yet the Biden Administration has ignored the rampant identity theft and fraud that’s left these people devastated,” said Smith in a statement on the committee website, adding that the bill would “recover stolen taxpayer money, help states ensure this scale of fraud never happens again, and help bring to justice those who committed these crimes.”

He was joined by Rep. James Comer, the House Oversight Committee chair, who said that “Pandemic unemployment fraud may be the greatest heist of American taxpayer dollars in history…We must ensure Americans’ hard-earned dollars are stewarded, not squandered or stolen.”

In addition to retaining fraud money, the bill would also permit states to retain 5% of any overpayments made by federal unemployment insurance programs during the pandemic that were not fraudulent. It would also extend the time frame for recovery of these benefits from three years to 10 years, while extending the statute of limitations for fraud of such benefits, a felony, to 10 years from five years, according to the bill’s text.

It is unclear whether the bill may be passed by a Democratic-led Senate, or whether President Joe Biden would sign the bill.

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